Social Security benefits increase when there is inflation and it could affect the purchasing power of retirees and other recipients. In this way, SSDI, SSI, and retirement benefits may keep up pace with the rising cost of living.
This year’s cost of living adjustment increase, also known as COLA, may be lower than in the previous years. That is good because it means prices have not increased so much, but it is bad because recipients get less money from Social Security.
What other disadvantages may have a higher Social Security COLA boost?
Apart from having to face soaring prices, a higher COLA for Social Security may force some retirees to pay taxes. If you do not have other sources or earnings, there is no need to worry.
However, if you are on Social Security and you have other sources of earnings, you may fall into a different threshold. Exceeding this limit may mean you have to pay more taxes.
So, you could see your benefits reduced. Low-income recipients would definitely benefit from a higher COLA boost because their benefits may not be affected. Getting more money may also mean you do not qualify for other benefits like SNAP or SSI. But what is the latest COLA Projection?
Social Security 2025 COLA projection
Since the Administration will not announce the 2025 COLA until October 10, recipients need to rely on projections from experts like the ones from the Senior Citizens League.
This week, the Senior Citizens League has announced a new COLA projection which is worse than expected. It’s gone down to 2.5%. So, if your retirement, SSDI, or SSI check is worth $1,000, it will just become $1,025.
As of August 14, the Senior Citizens League projection was 2.57%, down from 2.63%. So, it is unlikely that retirees and other Social Security beneficiaries qualify for a larger COLA than in 2023 or 2022.
Bear in mind that an increase of 2.57% means getting 2.57 dollars extra per each 100 dollars you get from the Administration. For example, a $1,000 check would become $1,025.7.
